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Andrusz v. Andrusz

Court of Appeals of Michigan

July 13, 2017

THADDEUS J ANDRUSZ, Plaintiff-Appellant,
JACQUELINE R ANDRUSZ, Defendant-Appellee.

         Oakland Circuit Court LC No. 2008-744224-DM

          Before: Riordan, P.J., and Ronayne Krause and Swartzle, JJ.

          Ronayne Krause, J.

         Plaintiff appeals by leave granted the trial court's order clarifying the terms of the parties' consent judgment of divorce; which in relevant part ordered plaintiff to pay defendant a sum of money that the court concluded he had underpaid, ordered plaintiff to obtain a life insurance policy in favor of defendant, and declined to reduce the spousal support award. On reconsideration, the trial court clarified that plaintiff may craft the life insurance policy to avoid making potentially posthumous payments to defendant. We affirm in part, reverse in part, vacate in part, and remand for further proceedings.

         The parties were married in 1984 and had two children, twins born in 1995. The parties' relationship apparently broke down as a result of defendant's psychological illnesses, culminating in a hospitalization in 2008. Plaintiff had been aware of her mental illnesses during the marriage, and it is undisputed that defendant has serious mental and physical health problems. Defendant did not work at all after the children were born, and apparently has worked "very little" since the divorce. The parties arrived at a consent judgment of divorce that was entered in 2009. At issue in the instant proceedings is primarily the interpretation of certain of plaintiff s obligations thereunder.

         In relevant part, the consent judgment provided as follows:

3. Defendant is awarded modifiable spousal support that shall terminate upon the death or remarriage of the Defendant. Commencing January 1, 2009, Plaintiff shall pay $6, 000 per month from Plaintiffs salary directly to Defendant on the first of each month based on Plaintiffs base income of $204, 000 annually and Defendant having no income. Additionally, in the event Plaintiff's salary from employment is greater than $204, 000 in a given year (January 1 through December 31), he shall pay 25% of said amount from employment-related bonus or commission via electronic fund transfer to Defendant as additional spousal support within 7 (seven) days of receiving same. This shall not include any NBC retention bonus Plaintiff may receive in 2009. Regarding any potential NBC retention bonus Plaintiff may receive, 33.3% of any gross amount of this retention bonus shall be paid to Defendant immediately as it is received by Plaintiff, as a one-time additional spousal support payment by Plaintiff to Defendant. All spousal support paid by plaintiff shall be taxable as income to Defendant and tax deductible from Plaintiff's income for purposes of income taxes in accordance with IRS regulations. Plaintiff shall secure his spousal support obligation with existing life insurance on Plaintiff's life or in a life insurance trust naming Defendant as an irrevocable beneficiary of said life insurance. Plaintiff shall provide proof of said security/insurance in compliance with this provision on a yearly basis to Defendant. A Uniform Spousal Support Order shall enter in accordance with this provision.

         As the trial court recognized, the center of the instant controversy is the phrase "salary from employment."

         The instant dispute began when defendant reviewed plaintiff's W-2 forms and concluded that plaintiff had "shortchanged" her because he consistently earned more than $204, 000 but calculated the 25% he owed from the excess based on reported taxable income instead of "Medicare income, [1]" "thereby not accounting for his earned income that he deferred into his 401K [sic]." She also contended that he had not properly verified the existence of the required life insurance or trust securing his spousal support obligations. Plaintiff contended that defendant was misrepresenting or misunderstanding the terms of the consent judgment because his actual "salary from employment, " as specified in the consent judgment, was considerably less than $204, 000, and the language regarding excess payment pertained to his base salary rather than gross income.

         At the time of the parties' divorce, plaintiff received a total income of "$565, 000.00 and change, " consisting of a base salary of $203, 894 and the remainder from commissions. He was laid off shortly thereafter, and his substitute employment initially provided a base salary of $143, 000 plus eligibility for commissions and bonus. By the time of the instant proceedings, defendant's base salary had increased to $187, 455.84, with an additional car allowance, a company credit card for certain business expenses, and up to 30% beyond his base salary in possible commission bonuses and a "speculative" possible additional bonus. Plaintiff put some percentage of his compensation into a 401(k) account, but because of the fluctuation in his total compensation, he did not know exactly how much. There has been no suggestion that plaintiff is not in good faith endeavoring to maximize his earning capacity.

         It appears that defendant testified, but for unexplained reasons her testimony was not transcribed. Plaintiff does not dispute the trial court's summary that defendant "testified that she would like to work but currently has back and leg problems and is fearful of mental instability" and has approximately $6, 100.00 in monthly expenses. The consent judgment did not require either parent to contribute to the support of their children after they reached the age of majority, but plaintiff nevertheless continued paying the entirety of the children's substantial college expenses and unspecified other expenses. Plaintiff testified that he had asked defendant to help, but she did not.

         Plaintiff testified that he understood the consent judgment required him to pay defendant $6, 000.00 a month if his salary was $204, 000.00 a year, and that "salary" referred to his "base salary." He noted that he had paid the $6, 000.00 even though his base salary had been below that amount every year other than in 2009, and he also voluntarily overpaid her an additional amount calculated on the basis of 25% of his entire compensation above $204, 000.00 "because [he] wanted to address some of the issues with [defendant] and the kids." The trial court found, accurately insofar as we can determine, that plaintiff's total income had been reduced by more than half. Plaintiff asked the trial court to reduce his spousal support obligations accordingly and "uphold the original decree which states clearly that it is based on my salary, " but sought no reimbursement.

         The trial court concluded that "the plain language of the [judgment of divorce], and the intent and actions of the parties commands that the Plaintiff pay the Defendant 25% of any earned income over $204, 000.00 as a result of his employment" and that that included "taxable and non-taxable income." The trial court did not deem plaintiff's car allowance or expense account to be "income, " but it did conclude that between 2012 and 2014, the years for which tax information had been provided, plaintiff had underpaid defendant by a total of $15, 591.67. Despite observing that plaintiff's total income had decreased by more than half and that plaintiff was solely paying for the parties' children's expenses, it declined to reduce plaintiff's spousal support obligation, noting in particular that plaintiff was not legally obligated to support the children. The trial court finally ordered plaintiff to maintain a life insurance policy in favor of defendant, the value of which plaintiff does not appeal.

         As an initial matter, plaintiff inexplicably contends that the trial court's order requiring him to obtain a life insurance policy would effectively grant defendant a potential posthumous award. This issue was rendered moot in the trial court's order denying reconsideration. As noted, the trial court expressly clarified that because the consent judgment unambiguously terminated any of plaintiff's obligations in the event of defendant's death, plaintiff was free to craft the life insurance policy such that it would also terminate upon her death. The only way for ...

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